The days of battling for mid-level PR talent are – for now – clearly over. But all the recent PR layoffs raise the question, is the industry headed toward another mid-level talent crunch when the economy improves? Some agency execs who I’ve spoken to have said the answer is “no” because senior-level folks are being harder hit. “If firms need to make deep cuts, the $200k folks will go first and not day-to-day client contacts earning $100k,” said one agency principal.

Another principal added, “A lot of companies will be laying off more expensive people at the manager and director level people rather than at the AE/SAE level.”

Amid these troubled times, a third principal wistfully noted, “Talent crunch is a good problem to have – it means you’re growing. Right now agencies are worried about surviving.”

On Tuesday, PRWeek’s editor-in-chief Keith O’Brien moderated a mediabistro.com panel, “The Customer is the Company: How Social Media is Changing Business”. Among the seven panelists were Craig Newmark, Craigslist founder and customer service rep; Tony Hsieh, CEO of Zappos; and Jeff Howe, contributing editor at Wired and “crowdsourcing” expert.

The panel touched upon your typical social media issues - why/how/when to use, when to separate corporate and personal blogs and Twitter accounts, ROI, etc. - but the techy talk seemed to fall flat next to Hsieh’s passion for customer service and a discussion about Zappos’ internal comms and hiring strategy (and Keith’s jokes about robots, of course). At the end of the first week of the four-week long new employee orientation, which includes customer service training, Zappos offers employees $2,000 to quit to weed out those who aren’t completely dedicated to the concept of service and the brand– seriously!

While Hsieh focused less on social media than on how Zappos’ corporate culture - customer service and a positive staff energy - contributes to its success, it’s well known that the company served as a social media pioneer, using Twitter for customer interaction. So Zappos serves as a model that success in the digital age can also be rooted in Stone Age values.

Alex Bruell and I recently had the opportunity to speak at a BU PR class (we were in the area for a digital roundtable) that was titled PR and New Media. Many of the students unsurprisingly had blogs, but it was refreshing to see some were very skeptical about the new media environment. I told them that the PR industry leadership did not expect them to have a mentality that pitched new media above all else. I said - the industry expects them to be able to translate the value (to their peers) of the tools PR professionals. Today’s marketing executives know that young people are hanging out on Facebook, IM. But few know exactly why. That’s just one thing you will be expected to bring to your employers. What else is the industry expecting?

I recently wrote an Agency Business feature on the effect that celebrity influence has on fashion PR recruitment. Because so many of those I spoke with saw “celebrity” as a predominant trend, I was unable to include all of the interesting bits they said, including the impact of a weakening economy on agencies representing emerging designers.

Mauricio Padilha, CEO of Mao PR, an agency that specializes in new designers, was one executive who said clients are holding their wallets tighter.

“Due to the poor dollar, potential clients are weighing the benefit of PR more carefully,” Padilha said, via e-mail. “Conversely, European designers have been looking for representation in the states more so than in the past.”

The crunch makes every dollar spent more important, too, he said.

“Grabbing an editor’s attention and getting them to support a brand takes on more urgency,” he said. “Also, knowledge of Photoshop is next to essential and helps cut costs.”

As a result, he said, “When we do hire, it’s important that the candidate possess extra skills, such as foreign language or computer skills, in addition to their strategizing skills.”

Cece Feinberg explained that current economic conditions dictate a fine balance between youth and experience. Feinberg, representing both corporate and emerging designers, says that her agency focuses a little stronger on the corporate client.

“An emerging designer is less likely to pay their bills, to be blunt about it, so you really do want [a candidate] who is responsible, someone who can speak to both the corporate client and a type of fashion editor,” she said. “There still has to be a youth and an understanding of trends and what’s going on in fashion.”

Anyone want to offer more input on how the economy is affecting fashion PR? Please do!

A study by StevensGouldPincus of 150 PR firms found that turnover averages 20% per year, with larger firms, billing $25 million or more, seeing rates of 24% per year. Agencies billing $3 million or less are seeing 19.2% turnover. Highest turnover by specialty is real estate PR (27.2%) and lowest is among the healthcare (18.6%), consumer (18.5%), and food and beverage industries (18.7%). StevensGouldPincus gives a list of proposed best practices to lower turnover rates from Fred Bateman, CEO of San Francisco’s The Bateman Group, which reported no turnover in the 12 months prior to the study. Among his suggestions: give employees the option to telecommute or work flexible schedules, give staff the technology to take advantage of those flexible options, and never take on a boring client simply for the sake of revenue.

What are your suggestions for staff retention?

It’s time to pull out your digital camera for the stretched-arm social networking picture, as LinkedIn is now including photos on its profiles. But as a site that emphasizes career networking (not just making pals), LinkedIn is encouraging users to post “professional headshots.” Of course this still raises legal issues since it is against the law to use race or age to influence hiring decisions. But Kay Luo, director of corporate communications at LinkedIn, says the company is letting employers turn off the feature to avoid this trouble. And good news for the camera shy — there won’t be a shadowbox on users who opt out.

So did the company make the move because it is losing professional users to Facebook? When it comes down to numbers, LinkedIn’s 14 million users is no match for Facebook’s 43 million. But Luo says the site will stay career-focused, and not blur the lines between users’ social and professional identities.

“We found that unless you keep a razor-like focus on being a professional site, it will digress into a social site,” she says.

An employee from Padilla Speer Beardsley posted on its blog today that everyone is fine, in the wake of the horrific bridge collapse.

The blog now has pictures from the PSB offices.

My column this week focuses on the stars on your team- and the debate over whether or not employers should tell these individuals that they are being groomed for bigger things in the organization.

It seems my assertion in the piece that “stars know they are stars” is open for debate. I was having a drink with a contact late last week and explaining my theory, which he vehemently disagreed with. In PR, he says, stars don’t always know they are stars. In fact, PR people depend greatly on feedback and affirmation in their jobs. That view does speak to the perception that PR professionals are, by nature, collaborative and eager to please. It’s a strength, not a weakness, but something that, if true, should be taken into account. Intangible benefits are sometimes the ones that are most difficult to deliver, particularly in this time-pressed universe.

So let’s hear what you think - should you tell your stars where they fit in your universe, or keep that quiet? Do PR professionals need that kind of motivation and reassurance to progress?

Bill Proenza, the head of the Miami-based National Hurricane Center who complained about money spent on a two-year educational campaign by the center’s parent organization, the National Oceanic Atmospheric Administration (NOAA), has .

Proenza had argued that NOAA was jeopardizing weather forecasting by spending money on PR when the center needed, among other things, to replace its Quick-Sat weather satellite. Others in the agency have said much of the same data that satellite collects is obtainable through other means.

Nearly half his staff signed a letter last week saying he had “poisoned the atmosphere here at the Hurricane Center” and asking him to resign, which he refused to do.

* Correction - the blog post previously said Proenza had resigned.

Todd Defren, Shift, discusses the agency’s recent RealNetworks win [PR Squared]

Nichole Woodcock, MS&L, discusses her transition from trad PR to [BlogWorks].

Sony Playstation launches a company blog [Playstation blog, via The Viral Garden]